Top Three Biggest Customer Acquisition Mistakes – Part 1

Mistake #1 – Assuming Analytics Can Give You Exact Answers

When people come from the offline world to the digital world, they get so excited about their ability to measure customer activity that they start thinking that the data is accurate down to 4 decimal places.  However, while online marketing is a lot easier to track than TV or radio, it has a number of pitfalls.

The more you know about how Google Analytics and other web analytics tools work, the more you realize that there is a pretty big margin of error.  For example, Google Analytics often undercounts most conversion events by about 15%.  This is a known issue with web analytics programs; they often undercount actions on your site because these tools require JavaScript to successfully fire before customer moves on to the next page.

As well, there are lots of cases where people are touched by multiple marketing programs, and Google Analytics by default only reports on the last marketing sources.  This means that multiple channels may have contributed to a conversion, but Google Analytics only credits the final channel.  Even if you know which marketing channels touch a customer, it can be really tricky to decide which one caused the customer to convert.  Think back to some big purchase you made and try to tie that back to one or a few specific ads.  Chances are that you won’t be able to attribute your decision to purchase back to specific ads so easily.  We are influenced by lots of advertising signals and it is hard to understand how our own brains work, let alone the brains of thousands or millions of customers.

Furthermore, there are plenty of marketing activities that are not tracked by Google Analytics.  If someone listens to a podcast, views a video in YouTube, or sees an ad in Facebook but doesn’t click on it, Google Analytics has nothing to record. However, the reality is, those channels all influenced a person to purchase or convert, despite not being tracked by Google Analytics. 

Said another way, a lot of things can go wrong with tracking which marketing sources are driving your conversions, but luckily, all your marketing sources will be measured the same way.  There are cases when some sources are more impacted than others, but usually, the similarities are greater than the differences.  For these reasons, you want to focus on the relative performance of your marketing sources and campaigns more than the absolute performance.  Take all your marketing sources and campaigns and rank order them using return on ad spend.  Then, cut off the bottom ones and funnel that money to the ones at the top.  After that, figure out how to improve the ones in the middle.  Don’t lose sleep over what the exact return on investment is for a given marketing source — you are trying to achieve a level of precision that isn’t there.

This post is based on content in How to Acquire Your First Million Customers by Ken McDonald and Chris Newton, two Internet execs who have grown multiple companies to over 10 million customers. Get your copy of the book to learn more proven customer acquisition tips and techniques.